Tomasz Tunguz

Partner, Redpoint Ventures• I write about SaaS startups at tomtunguz.com

• Redpoint works with many as-a-Service companies including Stripe, Twilio, Zuora, Zendesk, Looker, Infer, Tidemark, and Expensify

• Former PM at Google; statistics nut

Why CS Is Critical

Happy customers, better product

Grow faster

Decrease capital needs

Hypothetical SaaS Company

$50k in MRR

50 customers at $1k ARR each

$1250 in CAC, Sales Efficiency of 0.8

Growing 15% m/m

How Much to Spend on CS?

Expected Value =

Save Rate x Value of Extension =

30% x 12 months x $83/month =

$298 or about 30% of ACV

Return on Investment?

2 pp decrease in churn

- Increases revenue by 50%

- Decreases S&M spend by 30%